Law Legal Studies · Commerce Accountancy
Partnership and Business Law
1,007 Questions
Test your knowledge of partnership regulations and business law with these practice questions. The topics include the rights of minor partners, firm dissolution, retirement rules, and public notices. This material is crucial for law exams and legal studies.
Rights of minor partnersPublic notice requirementsFirm dissolution rulesPartner retirementHolding out partner principlePartnership deed provisions
Partnership and Business Law Questions
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entitled to keep the whole profit himself
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entitled to account for that profit and pay it to the firm
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entitled to do as he wishes
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none of these
B
Correct answer
Explanation
If a partner has earned any profit from the use of property of the firm, the partner is entitled to account for that profit and pay it to the firm, and not keep it himself, subject to contract between partners. As all the partners are agents and principal and for the act of a partner, all the partners are responsible. The profit earned by a partner from the property of firm must be accounted for and distributed in the partners in the agreed ratio that is the main reason that it is right answer here.
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A minor can not take benefits of a partnership firm.
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A minor can become a partner of a partnership firm.
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A minor can take benefits of a partnership firm.
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None of these
C
Correct answer
Explanation
According to the Contract Act 1872 with the consent of all partners a minor can take benefits of partnership firm
B
Correct answer
Explanation
Registration of a partnership firm is optional, not compulsory, under the Indian Partnership Act, 1932. However, non-registration carries certain legal disadvantages.
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individual
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joint and several
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optional
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limited
B
Correct answer
Explanation
All the partners are jointly and severally liable for the acts of firm.
The liability of partners is unlimited.
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A partner caught traveling without ticket
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Adulterous relations of partner
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Fraudulent breach of trust by partner
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To come late to office very often
D
Correct answer
Explanation
All others are examples of misconduct sufficient to dissolve the firm.
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outsiders secured
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outsiders unsecured
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private debts of partners
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any of these
A
Correct answer
Explanation
The debts of outsiders, which are secured, are paid first.
The unsecured outsiders, private debts of partners are paid in the order after the above debts.
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To employ servant for the firm.
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To open a bank account in name of firm.
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To pledge goods for borrowing money for firm.
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To settle accounts of the persons dealing with firm.
B
Correct answer
Explanation
A partner cannot open the bank account for firm under his implied authority.
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To settle a suit on behalf of firm
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To sale the building of firm
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To submit a dispute of firm to arbitration
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To defend an action against the firm
D
Correct answer
Explanation
A partner can defend a suit against the firm in the Court.
All others are statutory restrictions which can be done by the partners collectively.
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sharing of profits
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sharing of losses
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mutual agency
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partnership deed
C
Correct answer
Explanation
The partners should have agency relations among themselves.
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one year
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a particular venture
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a definite period
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an indefinite period
D
Correct answer
Explanation
The partnership at will continues as much as is the will of partners.
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at the time of starting only
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one month after starting business only
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one month before starting business only
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any time
D
Correct answer
Explanation
A firm may get registered any time.
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individual
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joint and several
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optional
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limited
B
Correct answer
Explanation
All the partners are jointly and severally liable for the acts of firm.
The liability of partners is unlimited.
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is binding upon the firm
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is binding upon the partner himself
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is optional for the firm to assume
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does not bind anyone
A
Correct answer
Explanation
Because of mutual agency relations, the partners can bind the firm provided the act is done in good faith and within authority.
The acts done outside the scope of authority are not binding upon the firm.
B
Correct answer
Explanation
A notice to the active partner serves as a notice to firm.
However, notice to sleeping or dormant partner is not the notice to firm.
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of notice
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of his attaining majority
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of his admission to partnership firm
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as he desires
C
Correct answer
Explanation
In absence of contrary agreement, he becomes liable for the acts done by firm from the date of his admission.